[SMM Analysis] Lithium hydroxide production remained stable with a slight MoM increase in July, and is expected to pull back slightly in August

According to SMM data, domestic lithium hydroxide production in July saw a slight MoM increase but a 22% YoY decline. On the smelting side, orders for ternary cathode material were slightly better than expected, with downstream and end-user cargo pick-up volumes increasing slightly. Some manufacturers adjusted their production based on sales, leading to an increase in output. Additionally, newly commissioned capacities were in the ramp-up stage, driving a 2% MoM increase in smelting-side production. On the causticisation side, due to a slight recovery in orders for some enterprises, output increased by 8% MoM.

Looking ahead to August, due to limited market expectations for incremental production, some lithium chemical plants plan to switch their flexible production lines to lithium carbonate output, and smelting-side production is expected to drop back slightly. Meanwhile, as some causticisation enterprises plan to halt production, causticisation-side output will also decrease. Overall, total lithium hydroxide production in August is expected to decline by 5% MoM and 24% YoY.